Indonesia: More visitors

Despite an uncertain economic climate, the number of foreign visitors to Indonesia continues to rise and the country is looking to build on its recent success and diversify the tourism sector.

As of July, some 4.96m foreign tourist arrivals were registered for 2011, up 7.32% on the same period for 2010, according to official statistics. In September, the last month figures were available, 650,000 visits were recorded, up from 560,000 in September 2010. Nearly 253,000 foreign tourists, almost 40% of the total, visited the island of Bali, which has long been regarded as the centre of the country’s tourism industry.

Although Jero Wacik, the former tourism minister, has warned that the sector could be affected by the uncertain global economic climate, steady growth in visitor numbers has continued. The Ministry of Tourism expects 7.7m visitors for 2011, up 10% on the 7m that visited in 2010. Tourists’ expenditure is also expected to rise to $8.4bn from $7.6bn. As winter approaches in the northern hemisphere, sunny destinations such as Bali and elsewhere in Indonesia should see arrivals rise even further.

Riding this wave of increasing visitors, Indonesia continues to push ahead with its tourism development strategy, which involves attracting more visitors from fast-growing markets, strengthening value-added, high-end tourism and developing new destinations.

Indonesia is the fortunate position of being within easy reach of many of the world’s most important emerging tourism markets, including China, India and South-east Asia. Its greatest success has been in attracting more Chinese tourists, with arrivals leaping from just 36,685 in 2002 to 469,365 in 2010, according to Statistics Indonesia.

The number of Indian visitors has been more modest, with 137,027 visiting in 2010, up from 35,063 in 2002, although this might be explained by the Indian tourism market’s still relatively early stage of development. Indonesia also continues to benefit from its strong position on established tourism markets such as Australia and Korea, from which there were 771,792 and 274,999 arrivals in 2010, respectively.

But even within ASEAN, in which Indonesia is the most populous member, there is enormous tourism potential. ASEAN citizens made some 34m visits to other member states in 2010, representing 47% of total arrivals. This figure is probably inflated due to shuttle traders and migrant workers, but there is little doubt that other ASEAN nations, particularly Singapore and Malaysia, are important tourism markets for Indonesia. Increasing connectivity within the region is a priority that is likely to pay off in helping to support both business and leisure tourism.

Indonesia receives fewer tourists than one might expect for a country of its size and appeal. While increasing arrival numbers is certainly important, boosting the revenue per visitor is also a priority. This can be done by raising the number of destinations in the country that are able to cater to higher-value tourism categories, including cultural, adventure and luxury resort tourism, much of which is already being done by the private sector. The number of top-end hotels and resorts is on the rise, and more travel operators are offering trips with activities like wildlife spotting and trekking.

But the government is also playing its part. In August, tourism officials told the local press that they aimed to increase the number of cruise ship arrivals to Indonesia. In 2010 there were some 198 cruise calls to the country, bringing 94,228 passengers. The government is now focusing on improving and clearing ports to improve access for cruisers, as well as making Bali a regional cruise hub by 2014.

To this end, the Indonesia Investment Coordinating Board put out a call for expressions of interest in a $24m cruise terminal development in Bali. Tanah Ampo Cruise Terminal will cover 9000 sq metres and have capacity for two large cruise ships. The tenders will be for the construction and operation of the facilities.

Bali is perennially popular, but other destinations are also being developed, including the neighbouring island of Lombok, Sumatra in the west and Indonesian Papua. The aim is to ensure a sustainable tourism sector that will enhance and preserves the local ecosystems and cultures and contribute to regional economic development. Although there is a feeling that Indonesia has not been showcasing its enormous variety as well as it could, the rise of new destinations across the country’s many islands is changing that.

The Indonesian tourism sector certainly faces challenges, particularly in regard to the global economic climate, but it seems to have weathered current conditions fairly well. Infrastructure needs to be improved outside the major urban centres and more skilled tourism professionals, rare at the moment, need to be working towards developing operations, particularly in rural areas. The occasional wave of social unrest and the rare, but well-publicised terrorist attacks have also harmed the country’s reputation.

Nevertheless, the future seems bright, and Indonesia seems on track to continue building on recent successes to expand its diversified tourism potential to attract visitors from around the world.

Featured Countries in Tourism:

Covid-19 Economic Impact Assessments

Stay updated on how some of the world’s most promising markets are being affected by the Covid-19 pandemic, and what actions governments and private businesses are taking to mitigate challenges and ensure their long-term growth story continues.

Register now and also receive a complimentary 2-month licence to the OBG Research Terminal.